HMRC updates on corporation tax rules

Date: 10th November 2009

HM Revenue & Customs (HMRC) has published a number of updates on corporation tax rules, following a statement made on October 14th by financial secretary Stephen Timms.

Mr Timms returned on November 9th to update his comments in a further statement to the Treasury.

In his latest statement, the financial secretary explained that further legislation is being introduced in order to close a loophole in the previous plans.

This would allow companies to use the planned legislation, which would allow them to avoid paying tax on discounts on debt buybacks, to also avoid paying tax on the debt when it was subsequently released.

Mr Timms said: "The government is therefore proposing to introduce additional legislation to prevent this."

Proposed amendments to the Corporation Tax Act have now been published, introducing new clarifications for where exceptions to the legislation apply.

The revised Act also sets out the circumstances under which companies can qualify for exception from the legislation due to their purchasing of issued debts being part of a corporate rescue plan.

Posted by Emma Clarke